There are hundreds of people who walk into your store every day. This provides an opportunity to convert them into loyal customers. How do you impress them? A straightforward and data-driven way to ensure that you always meet your customers’ expectations is by investing in assortment planning.
What is assortment planning in retail?
Simply put, assortment planning is the process of deciding which products and varieties are sold at your store during a particular duration. This includes the number of products, variants for each product, and the correct amount of stock that your store should hold. This process can happen weekly, monthly, quarterly, etc. It highly depends on what your store offers to the customers.
Why is assortment planning important in retail?
Striking the right balance between having enough to satisfy customer needs and making sure that you are not left with dead stock is of utmost importance to maintain profitability.
Keeping in mind the market demand and customer expectations, while maintaining higher margins, is tough and it gets tougher especially in the retail sector. Heavily dependent on trends and seasons, fashion retail stores have to be meticulous during the assortment planning process. These changing trends add an additional layer of complexity over usual factors such as weather, festive seasons, holiday period, etc.
Considering the high stakes and significance of assortment planning, it is important to follow a process to get the balance right every time.
Is there a one-size-fits-all solution when it comes to assortment planning?
As most retailers who are a part of a chain of stores will tell you, the answer is no. It is important to take into account each store’s location, geography, store size, historic data and trends, customer demographics, local needs, etc. Though it is not feasible to have a global, national, or even state-wide strategy when it comes to assortment planning, it is possible to group similar stores into clusters based on certain common parameters. This can make assortment planning easier while presenting a chance to offer local products, offers, discounts, and promotions.
How to do assortment planning for retail stores?
As assortment planning takes into consideration numerous factors, it is important to create a methodical plan to help you navigate through this elaborate process. Here are some pointers to get you started –
Set goals – A smart assortment plan reflects the business objective of the company/store. This could mean expanding the category, ensuring growth, launching a product line, meeting certain sales benchmarks, etc.
Analyze – Evaluate historic store data from your last season and factors such as past sales, category trends, size preferences, fast-selling items, etc. This can help you understand customer demands and preferences.
Calculate – As it is important to have a balance between breadth and depth of product category, use data to ascertain the right balance to satisfy customer demand.
Cross merchandise – While deciding on the product selections, be sure to have products that can be promoted and placed together. An effective and creative display can prompt the customer to buy multiple products.
In-style and classics – Offerings at your store should be varied and vast. It is crucial to have products across categories in various colours, types, price points, and even trendiness. Some products are considered “classics” or “staples,” these are always in demand. Ensure these are always available along with current trends.
Visual merchandising – Take time to create an appealing storefront and interiors using visual merchandising. Placing the products at the right place at the right time can help you drive sales and loyalty.
Assortment planning doesn’t end here. Considering how quickly trends and demands change, it is imperative to stay engaged and aware of what is happening at your store. Having a smart merchandise planning, buying and demand sensing solution, can prove to be a vital tool during pre-season assortment planning and in-season retail challenges.
Increff’s smart merchandising solution provides support during assortment planning by analysing and forecasting across stores based on past sales, revenue, discounts, size cuts, stock-outs, and exposure. It aids in determining actual procurement orders as well. Built-in analytics are designed to reduce deadstock and utilize inventory by optimizing stock across stores and providing dynamic markdown suggestions. Moreover, Iris X can simplify assortment planning by suggesting replenishment and replacement through automation.
Assortment planning is no longer a one-time, pre-season activity. It is a continuous process till each SKU leaves the store with a happy customer. The only way to navigate this increasingly complex process is to invest in an automated merchandising tool that lets you customize it to your preferences while setting benchmarks and providing smart analytics for the betterment of your business.
22 September, 2021
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